Possible Favorites for Chief of the Federal Reserve

By BINYAMIN APPELBAUM

April 24, 2013

Handicapping the candidates to succeed Ben S. Bernankeas Federal Reserve chairman has much in common with predicting the outcome of a golf tournament: There’s a good chance that the winner will not be one of the early favorites.

Few people predicted Mr. Bernanke’s selection by President George W. Bushin 2005. Here are a few people being discussed this time alongside Janet L. Yellen, the Fed’s vice chairwoman.

Mr. Ferguson, 61, holds doctorates in law and economics from Harvard. He worked at the consulting firm McKinsey, becoming a partner and director of research and information systems, before joining the Fed in 1997.

Jim Young/Reuters

Mr. Ferguson is regarded as a skilled manager deeply versed in the mechanics of the financial system. He is also well liked by former colleagues. But he is not an academic economist. And as the Fed’s vice chairman, Mr. Ferguson oversaw the central bank’s regulatory operations in the period leading up to the financial crisis, when it failed to check the excesses of the financial industry.

TIMOTHY F. GEITHNER, the Treasury secretary during President Obama’s first term, was president of the Federal Reserve Bank of New York from November 2003 until January 2009. That position is widely regarded as the second seat at the central bank because the New York Fed oversees the core of the nation’s financial system and conducts the bulk of the Fed’s own trading. The New York Fed’s president also serves as vice chairman of the Fed’s policy-making committee.

Mr. Geithner, 51, who holds a master’s degree in international economics from Johns Hopkins University, lacks the academic credentials of recent chairmen. He has also disavowed interest in the job.

Manish Swarup/Associated Press

Timothy F. Geithner, right, with Ben S. Bernanke.

And like Mr. Ferguson, he was among the officials responsible for the Fed’s regulatory failures. But Mr. Geithner’s candidacy is difficult to dismiss because of his close relationship with Mr. Obama, who will pick the nominee, and because he is known and respected by investors.

He worked closely with Mr. Bernanke both at the New York Fed and as Treasury secretary, so he would provide a degree of continuity. And some argue that his skills in managing financial markets could prove particularly relevant as the Fed begins to retreat from its huge stimulus campaign.

LAWRENCE H. SUMMERS, Mr. Obama’s chief economic adviser in 2009 and 2010, shares with Ms. Yellen the unusual combination of a sterling academic reputation and long experience as an economic policy maker. An economist by training, he was Treasury secretary during the final years of the Clinton administration and is now a professor at Harvard.

Mr. Summers, 58, has never worked for a central bank, although he has written extensively about macroeconomic policy. He has also been passed over once, having sought to replace Mr. Bernanke in 2010. And he has a mixed record in leadership roles, including his stormy five years as Harvard’s president, which ended in his resignation.